Shares of Twitter fell more than 5 percent in premarket trading on Monday as investors anticipated a potentially drawn-out legal battle between the social network and Elon Musk over his backing out of a deal to buy the company.
mr. Musk reached an agreement to buy Twitter for $44 billion about three months ago. On Friday, he tried to back out of a legally binding acquisition agreement, saying Twitter didn’t provide the information needed to count the number of spam accounts on the platform.
Twitter shares have lost a third of their value since April 25, when Mr. Musk’s offer to buy the company was accepted by the company’s board. Since the deal was signed, investors have become increasingly doubtful that the acquisition by the fickle billionaire will be carried out on agreed terms. Twitter shares are trading below Mr. Trump’s $54.20 price. Mask, and well below the highs that were above $70 last year.
mr. Musk has been arguing with Twitter executives for months over his request for information on how he detects and counts spam accounts on the platform. He even expressed his displeasure online, going so far as to tweet a poop emoji on Parag Agrawal, the company’s chief executive, in response to his tweet explaining how Twitter detects spam accounts. Experts said Mr. Musk’s reasoning is not legally sound, and he believes his focus on false reports could be a tactic to trade for a lower purchase price.
In May, Mr. Musk said it was “not out of the question” to buy Twitter at a lower price during a technology conference in Miami. Bret Taylor, chairman of Twitter, tweeted Friday that the company’s board of directors is determined to close the deal “at the price and terms agreed with Mr. Trump.” Musk and plans to sue him.